Takeaways from 2010 GMA Food Litigation Conference
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Stoel Rives was a sponsor of this year's GMA food litigation conference in Austin from February 22 to 25. The slide deck from Ken Odza's presentation on consumer fraud class claims can be viewed by clicking on the image to the left.
Some of the takeaways from my presentation and those by others at the conference include:
- Assure Marketing Is in Sync with R&D (to Avoid Exposure from Consumer Fraud Class Claims) (Ken Odza, Paul Benson, Richard Fama)
The point was underscored in several presentations that exposure on consumer fraud class claims often comes from unsupported marketing claims (health claims in particular). Marketing departments should make sure not only that claims are supported but that the supporting research is not contradicted by other credible internal or external research.
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Iqbal/Twombly Makes FRCP 12(b)(6) Motions More Attractive (Ken Odza, Richard Famas)
The Supreme Court has overruled the Conley standard on Rule 8 notice pleading. "Plausibility" is the new pleading standard on a Rule 12(b)(6) motion to dismiss. If the operative allegations are not factually specific and the complained-of-conduct can be explained by another obvious reason, the complaint may be dismissed. -
Class Certification in Consumer Fraud Cases Not Likely If Individualized Reliance/Causation Need to Be Proven (Ken Odza)
A court should deny class certification in a consumer fraud case under the FRCP 23(b) "predominance" standard (1) when the proposed class includes multiple states with materially different statutes or (2) where the applicable state law requires an individualized showing of reliance/causation for each class member.
- Inexorable Pursuit of Zero, and the EPA Asserting Itself in Food Safety (Scott Rickman, Bob Brackett)
As technology improves and chemicals can be detected at lower and lower levels, regulators are looking at stricter standards and lower thresholds. EPA, for example, has a renewed emphasis on risk assessments that will inevitably affect food regulation.
- FALCPA Does Not Apply to Restaurants, but "Allergen-Free" and "Gluten-Free" Claims Must Be Supported (Joseph Bottiglieri)
- Pros and Cons Of MDLs (Paul LaScala)
Paul La Scala provided a thorough and thoughtful analysis of the pros and cons of Multi-District Litigation (MDL) from a defendant's perspective.
- FDA Recall Procedures Manual Is a Great Resource and Can Be Found Online (Tom Mazziotti)
The FDA's regulatory procedures manual (or at least the chapters related to recalls) should be mandatory reading as part of any company’s recall preparedness program.
- Class Actions and Mass Torts on the Rise Internationally with More Countries Passing Plaintiff-Friendly Laws (Greg Fowler)
American companies selling products abroad need to be aware of and prepared for litigation abroad with rules that are increasingly unfriendly to business.
One Lesson From Fitzpatrick v. General Mills: Class Cert. Tough To Oppose In Consumer Fraud Cases When Plaintiffs Don't Have To Demonstrate Individualized Reliance/Causation
Last month Judge Paul Huck of the U.S. District Court for the Southern District of Florida granted in part and denied in part class certification on claims brought in Fitzpatrick v. General Mills. Judge Huck granted class certification on claims asserted under Florida’s Deceptive and Unfair Trade Practices Act (FDUTPA) but denied class certification for claims of breach of express warranty.
The named plaintiff asserted violations of FDUTPA and express warranties for purchases of Yo-Plus yogurt. Plaintiff "alleges that eating Yo-Plus does not provide any digestive health benefits that cannot be obtained from eating normal yogurt."
Judge Huck ruled that in Florida, unlike in many other jurisdictions, consumer fraud claims do not require a showing of actual causation and reliance. Rather, in Florida "each plaintiff is required to prove only that the deceptive practice would—in theory—deceive an objective reasonable consumer." And for that reason, the court found that causation under the FDUTPA does not defeat the predominance requirement of class certification.
While FDUTPA does not require individualized causation and reliance, claims of UCC breach of express warranty do require individualized showing of "the particular promise that created the express warranty," according to the court. For that reason, the court held that "individual issues would predominate as to the breach of express warranty claims."
The Fitzpatrick ruling illustrates the difficulties defendants have in resisting class certification for consumer fraud claims in jurisdictions where the court finds no requirement of individualized reliance or causation.
Bagged Salads: Consumers Union Weighs In, Perishable Pundit Replies
The motto of Consumers Union, the publisher of Consumer Reports, is "working for a fair, just and safe marketplace for all." The motto of Jim Prevor's Perishable Pundit is "where the subject may be perishable but the insight isn't." When Consumer Reports publishes a report, it nearly always becomes widespread news. When Jim Prevor publishes a report, it will be carefully read and commented upon within the confines of the produce industry, but it is not often that it reaches national attention. Let us now match the insight of Jim Prevor against the values of Consumers Union. The subject: bagged salad.
Bagged salad is one of the most successful take-home convenience foods ever. The produce industry loves it, because it greatly expands the market for fresh produce. The packaging industry loves it, because it only works with special packaging that extends the product's shelf life. The grocery industry loves it, because it is high-margin, high-volume product that goes in the produce aisle. And consumers love fresh salad they don't need to prepare. Win-win-win-win.
Until Consumers Union comes along.
Consumers Union has published a report that is entitled, "Bagged Salad: Better Standards and Enforcement Needed." A shorter article is in the March issue of Consumer Reports, entitled, "Bagged Salad: How Clean?" Both are based on a study, funded in part by Pew Health Group, that examined samples of bagged salad purchased, as Consumers Union ordinarily does, in grocery stores near its Yonkers, New York headquarters. It found levels of bacteria they called "indicator organisms" that exceeded standards set by a number of other countries, since there is no federal standard in the United States. No E Coli O157:H7, listeria or salmonella was found.
From the study, Consumers Union concluded that the United States needed to adopt food safety legislation pending in Congress (about which we reported here), needs to declare known pathogens in leafy greens "adulterants" (even though the study didn't find any), and set satefy standards for indicator organisms. In addition, Consumer Reports recommended that consumers should:
- Buy packages as far from their use-by date as possible
- Even if the salad is pre-washed, wash it again
- Prevent cross-contamination with other foods (although the link the article does not, as it appears to promise, go straight to a how-to list for that)
Since this is of great concern to the produce industry, Jim Prevor sent the report to Dr. Trevor Suslow of the University of California at Davis., a plant pathologist. Apparently a number of other readers of the report did so as well, because Dr. Suslow's response printed in the Perishable Pundit is broader than Jim's questions. Dr. Suslow makes some very cogent points about the Consumers Union report.
- "We eat lots and lots of microbes all the time." And generally don't die from them. Leafy greens are colonized by microbiota, not contaminated by them.
- The specific number of microbes on a leaf do not relate well to risk of illness.
- Higher numbers closer to the use-by date are expected, particularly if the product was subject to significant changes in termperature. More specifically,
Because all the samples were taken from retail stores, the numbers of bacteria (not that fact that they were present) may tell us more about the temperature history of the product than provide clear evidence of poor sanitation.
- Additional washing of pre-washed greens can lead to cross-contamination and is not recommended. He cited a 2007 study to that effect which concluded,
additional washing of ready-to-eat green salads is not likely to enhance safety. The risk of cross contamination from food handlers and food contact surfaces used during washing may outweigh any safety benefit that further washing may confer
His ultimate recommendation was that a consumer should check both the way the bagged salads are placed in the store (vertical in a row, not placed on top of one another in a stack) and get a feel for the temperature at which they are stored (both the air and the bag should feel "very cool").
As I read the report and the rejoinder from Dr. Suslow, it would seem the Perishable Pundit has the better of it. What Consumers Union proposed would seem to lead to a lot of regulation and attendant expense, leading to a false sense of security in consumers. What Dr. Suslow proposed would seem to enable consumers to make senisible choices for themselves.
Consumer Fraud Class Claims Presentation at GMA
In just a couple of weeks (Feb. 23-25), I’ll be in Austin for the GMA Food Claims & Litigation Conference. Let me know if you plan to attend. I’ll be presenting with Scott Rickman from Del Monte Foods on consumer fraud class claims arising from food product labeling and marketing. Anyone in the business of selling branded food products should be tracking the trends in consumer fraud class claims. Thanks to the erosion of preemption defenses and increased FDA enforcement action, we’re see many more of these claims, and more result in protracted litigation.
If you’re interested in a preview of the consumer fraud issues that we’ll cover, look at the related posts here. If you can’t be in Austin, let me know and I’ll be happy to share the PowerPoint slide deck and supplemental materials.
Also, if there’s something related to consumer fraud claims or food liability that we haven’t covered in the blog or that you’d like to see more coverage on, please let me know. We at foodliabilitylaw.com would love to hear your feedback. Thanks!
Court's Decision on CR 12(b)(6) Motion In Zupnik: FFDCA Preemption Under Further Attack and Twombly Ignored
We previously cited the motion to dismiss in Zupnik, et al. v. Tropicana Products, Inc. as an example of good pleading practice in a putative consumer fraud class case. United States District Judge Dale S. Fischer apparently disagreed with our assessment, this week issuing an order denying the motion.
Tropicana’s lead argument was a failure of pleading. Tropicana attacked the complaint both on the basis of Rule 9(b), and under the Supreme Court’s recent decision in Twombly. The Twombly decision requires the federal court on a Rule 12(b)(6) motion to determine whether operative factual allegations are “plausible” and more than simply “conclusory.”
Judge Fischer rejected summarily Rule 9(b) arguments. She completely disregarded Tropicana’s Twombly arguments, failing even to mention the Supreme Court’s decision.
Tropicana also moved to dismiss based on federal preemption. Most of Judge Fischer’s decision is devoted to the preemption argument. She ruled that since California’s Sherman Law is substantively identical to 21 U.S.C. § 343(a) of the FFDCA, the preemption argument fails.
Judge Fischer theorized that even though plaintiffs could not point to anything on Tropicana’s label that violated any FDA regulation, the FDA could bring an enforcement action “to target specific false or misleading labels.” If the FDA can bring that kind of action under 21 U.S.C. § 343(a), plaintiffs, according to Judge Fischer, should also be able to bring a private right of action under the identical California law. Query whether Judge Fischer’s reasoning negates any FFDCA preemption defense to a claim brought under California’s Sherman Act?
